EQS-News: 2026 Half Year Results

EQS-News: RHI Magnesita N.V. / Key word(s): Half Year Results
2026 Half Year Results

31.07.2026 / 09:45 CET/CEST
The issuer is solely responsible for the content of this announcement.

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31 July 2026

RHI Magnesita N.V.

(„RHI Magnesita“ or the „Company“ or „Group“)

 

2026 Half Year Results

 

Consistent self-help delivery and strong steel business performance delivers 42% Adj. EBITA growth on constant currency basis

 

RHI Magnesita, the leading global supplier of high-grade refractory products, systems and solutions, today announces its
unaudited results for the six months ended 30 June 2026 (“H1 2026” or the “Period”).

 

Financial results
(Adjusted, €m unless stated otherwise)^1 H1 2026 H1 2025 Change H1 2025 (constant currency) Change (constant currency)
Revenue 1,595 1,677 (5)% 1,595 0%
Adjusted EBITDA 230 211 9% 186 24%
Adjusted EBITA 165 141 17% 117 42%
Adjusted EBITA margin 10.3% 8.4% 190bps 7.3% 300bps
Adjusted EPS (€/per share) 1.81 1.37 32%    
Adjusted Operating Cash Flow 160 175 (8)%    
Net debt^2 1,528 1,583 (3)%    
Net debt to Pro Forma Adjusted
EBITDA^3 2.9 3.1      

 

(Reported, €m unless stated otherwise)  H1 2026 H1 2025^4
Revenue 1,595 1,677
Gross profit 354 354
EBIT 98 61
Profit before income tax 47 14
Profit after income tax 36 11
EPS (€/per share) 0.68 0.15
Dividend (€/per share) 0.60 0.60

 1. Adjusted figures are alternative performance measures “APMs” excluding impairments, amortisation of intangibles and
exceptional items to enable an understanding of the underlying performance of the business. Full details are shown in the
APM section.
 2. H1 2026 Net debt includes IFRS16 lease liabilities of €86 million. For further details see Note 13.
 3. Pro Forma Adjusted EBITDA is used to assess financial gearing and includes a full year of Adjusted EBITDA contribution
from businesses acquired during the year.
 4. Gross Profit restatated due to accounting policy changes

 

Operational and strategic highlights

• The Group increased Adj. EBITA by €24 million, or 17%, versus H1 2025, despite a continuing soft refractory demand and a
material foreign exchange headwind. On a constant currency basis, Adj. EBITA increased by 42% year-over-year.

• The improvement reflects continued delivery of the Group’s structural self-help cost measures and price adaptations, in
line with expectations for 2026. These initiatives are well advanced and will deliver further benefits in 2027 as new raw
materials and network optimisation programmes  are rolled out.
• The Steel segment performed well, supported by cost and price self-help and demand growth in some regions, particularly in
India and U.S..

• The Industrial segment had weaker shipments than expected, reflecting softer demand for high-margin Industrial Projects
for Glass and Industrial Applications. Cement and Non-Ferrous Metals improved slightly year-over-year.

Financial highlights

• Adjusted EBITA increased to €165 million (H1 2025: €141 million), with margin expanding to 10.3% (H1 2025: 8.4%). This
included a foreign exchange headwind of €24 million.
• Adjusted EPS increased 32% to €1.81 (H1 2025: €1.37).

• Working capital intensity temporarily increased to 24% as the Group increased raw material inventory ahead of expected
stronger H2 order books, consistent with the normal working capital cycle and to mitigate tariff uncertainty. This
resulted in softer than usual operating cash flow and cash conversion of 97%. Net debt increased to €1,528 million, while
leverage remained flat at 2.9x net debt / Adjusted EBITDA.

• An interim dividend of €0.60 per share was declared, in line with dividend policy.

Outlook and guidance updates

• Full-year adj. EBITA is confirmed at €400 million, including a material year-on-year foreign exchange headwind of €35
million.
• The Group remains on track to deliver self-help from price adaptations and cost measures, including the previously guided
€45 million adj. EBITA improvement, being €15 million from each of price adaptations, network optimisation and
administrative cost savings. The self-help is being delivered in the current low-demand environment, strengthening the
Group and enhancing its operating leverage for when demand improves.
• Capital expenditure guidance for FY 2026 has been reduced from €130 million to €115 million.
• Guidance for working capital intensity remains unchanged at 22% by year-end, reflecting the unwind of the temporary
inventory build in H1.
• Gearing is expected to reduce towards 2.6x net debt to Adjusted EBITDA by year-end 2026, with net debt expected to fall to
approximately €1,400 million.

 

Stefan Borgas, Chief Executive Officer, said: “RHI Magnesita delivered a solid double-digit earnings improvement compared with
the first half of 2025, supported by continued progress on our self-help initiatives. We are pursuing further measures across
the plant network and raw materials, to reduce costs and sell into non-refractory raw material markets, to enhance the Group’s
operating leverage when demand improves. In addition, our €100 million investment in digital infrastructure, now around
two-thirds complete, will provide a strong foundation for future efficiency gains.

Our steel business is on a positive trajectory, particularly in North America, Europe and India. Conversely, Industrial
customers remain cautious in the current volatile market environment, which continues to weigh on investment decisions. This
has once again delayed the recovery we had expected in our high-margin Industrial Projects business.

We remain confident in stronger operational and financial performance going forward, underpinned by continued operational
improvement, a firm order book in Steel and Industrials, and a clear focus on cash flow generation and deleveraging.”

 

For further enquiries, please contact:

Investors:  Alexander Ordosch, Head of Investor Relations, +43 699 1870 6162, [1]alexander.ordosch@rhimagnesita.com

 

Media:   Hudson Sandler, +44 020 7796 4133, [2]rhimagnesita@hudsonsandler.com

 

Conference call

A presentation for investors and analysts will be held on 31 July 2026 starting at 8:15am UK time (9:15am CEST). The
presentation will be webcast live and details can be found on: [3] https://ir.rhimagnesita.com/. Alternatively, the webcast can
be accessed using the following link:

[4] https://www.investis-live.com/rhimagnesita/6a574b2e88e8430025846b80/nzrtd

A replay will be available on the same link shortly after event.

 

About RHI Magnesita

RHI Magnesita is the global leader in refractory products, systems, and solutions that enable high-temperature industrial
processes exceeding 1,200°C. Through its refractory products, services, and expertise, the company supports customers across
the steel, cement, non-ferrous metals, glass, and other high-temperature process industries. With more than 20,000 employees
and a global network of raw material sites, production facilities, recycling centers, and sales offices, it serves customers
worldwide.

RHI Magnesita is listed on the London Stock Exchange (RHIM) and has a secondary listing on the Vienna Stock Exchange. For more
information, visit www.rhimagnesita.com. 

 

FORWARD LOOKING STATEMENTS

This announcement contains (or may contain) certain forward-looking statements with respect to certain of the Company’s
current expectations and projections about future events. These statements, which sometimes use words such as „aim“,
„anticipate“, „believe“, „intend“, „plan“, „estimate“, „expect“ and words of similar meaning, reflect the directors‘ beliefs
and expectations and involve a number of risks, uncertainties and assumptions which could cause actual results and performance
to differ materially from any expected future results or performance expressed or implied by the forward-looking statement.
Statements contained in this announcement regarding past trends or activities should not be taken as a representation that
such trends or activities will continue in the future. The information contained in this announcement is subject to change
without notice and, except as required by applicable law, the Company does not assume any responsibility or obligation to
update publicly or review any of the forward-looking statements contained in it and nor does it intend to. You should not
place undue reliance on forward looking statements, which apply only as of the date of this announcement. No statement in this
announcement is or is intended to be a profit forecast or profit estimate or to imply that the earnings of the Company for the
current or future financial years will necessarily match or exceed the historical or published earnings of the Company. As a
result of these risks, uncertainties and assumptions, the recipient should not place undue reliance on these forward-looking
statements as a prediction of actual results or otherwise. The Company has no obligation or undertaking to update or revise
the forward-looking statements contained in this announcement to reflect any change in its expectations or any change in
events, conditions, or circumstances on which such statements are based unless required to do so by applicable regulations.
The numbers presented throughout this announcement may not sum precisely to the totals provided and percentages may not
precisely reflect the absolute figures, due to rounding.

 

OVERVIEW

Health & safety

Ensuring a safe working environment for our own workforce, including those working at customer sites, as well as contractors
on our sites, and visitors, remains a core value at RHI Magnesita. During the first half of 2026, the Total Recordable Injury
Frequency (TRIF) was 5.4 per 1 million hours worked up from 4.1 per 1 million hours worked end of 2025. The Preventive Rate
exceeded its H1 target, while the corrective action Closing Rate reached 90%, demonstrating consistent follow-up of identified
risks.

The increase in TRIF reflects the Group’s proactive approach to safety enhancement, as customer sites where our workforce
operates have been incorporated into its Safety Management System (SMS). The rollout of the SMS was completed in 2026 Q1, with
more than 113,000 safety reports submitted during the first half of 2026, an increase of 18% compared with H1 2025. This
reporting increase demonstrates the open Safety Culture that results in improved Preventive Rates and ultimately a better
safety performance and is not a primary signal of a higher number of safety incidents.

In parallel, the Safety Culture Transformation continued to progress across the Group, reinforcing leadership engagement and
proactive risk management in support of the Group’s ambition of Zero Harm.

Financial overview

Revenue declined by 4.9% to €1,595 million (H1 2025: €1,677 million) and stayed flat on constant currency basis. Pricing
initiatives could not fully offset a 2.7% reduction in sales volumes, particularly in high revenue per ton Industrial Projects
(Glass and Industrial Applications), and the significant foreign exchange headwind.

Against this backdrop, Adjusted EBITA increased to €165 million (H1 2025: €141 million) representing a 42% increase on
constant currency basis. Margins improved to 10.3% (H1 2025: 8.4%) driven primarily by self-help measures. Raw material
contribution stable at low of 0.9 percentage points (H1 2025: 1.1 percentage points).

Business performance in steel increased noticeably driven by product mix and price increases. Steel Europe and Steel India
achieved a turnaround in profitability, and earnings in Steel North America further improved. In contrast, the Industrial
business recorded a 13% revenue decline compared to H1 2025, which has already been a weaker period for Industrials. The drop
higher-margin Industrial Projects (Glass and Industrial Applications) impacted refractory margins negatively due to an
unfavourable product mix and fixed cost underabsorption.

Self-help cost saving measures across the plant network and SG&A were delivered in line with expectations, partially
offsetting external pressure from weaker mix, lower volumes and foreign exchange.

Working capital increased to €798 million (FY 2025: €769 million), primarily driven by higher inventory levels, which
temporarily weakened cash generation during the first half of 2026. Inventory intensity increased to 31.0% (FY 2025: 26.3%) as
the Group increased raw material inventory ahead of expected stronger H2 order books, consistent with the normal working
capital cycle, and to mitigate tariff uncertainty.

Adjusted EPS increased to €1.81 (H1 2025: €1.37), reflecting primarily higher earnings. An interim dividend of €0.60 per share
was declared, in line with the Group’s dividend policy.

Sustainability

During H1 2026, RHI Magnesita continued to make progress towards its 2030 sustainability targets. CO₂ intensity decreased by
6%against the 2024 baseline, driven by energy efficiency circular economy initiatives. Energy performance also improved, with
35 ISO 50001-certified sites covering 94% of global energy consumption and projects expected to deliver annual savings of
approx. 50 GWh by 2026.

ustainable procurement also progressed, with supplier assessment coverage reaching 61,3 % in H1 2026 (61,8% in H1 2025). While
spend coverage declined following the inclusion of recently acquired businesses within the KPI scope, this reflects the
expanded reporting boundary rather than a deterioration in supplier engagement.

Circular economy initiatives continued to contribute significantly to both environmental and financial benefits of
sustainability measures. The Group also improved its EcoVadis score to 81 (2025: 79), placing RHI Magnesita among the top 5%
of companies globally. The recycling rate increased to 19.5% in H1 2026 (H1 2025: 15.7%). A total of 270 kt of recycled
materials was incorporated into production (H1 2025: 208kt), resulting in an estimated 227 kt reduction in CO₂ emissions. In
parallel, the Group continues to strengthen its position as a leading technology partner for customers developing low-carbon
and green steel production technologies.

Outlook and guidance updates

We confirm full-year Adjusted EBITA guidance of €400 million, including a €35 million foreign exchange headwind, unchanged for
2026. The business is naturally more H2 weighted, because of stronger Industrial shipments during the cement season end of the
year, and higher Industrial Project deliveries. These market drivers and effective self-help also drove the stronger H2
performance in 2025.

Self-help measures initiated in 2025 continue to deliver the previously guided €45 million adj. EBITA improvement improving
operating leverage ahead of a demand recovery. Administrative cost reductions remain on track to deliver the guided €15
million earnings uplift, and network optimisation is also expected to deliver €15 million.

Steel market conditions remain soft, but the outlook is improving. Trade measures should support local demand, price
adaptations, and 4PRO business development. Underlying demand growth, particularly in India, together with pricing actions,
remains on track to deliver a further €15 million earnings improvement.

The Industrials business remains more challenging, mainly due to weakness in Industrial Projects, although underlying
fundamentals remain strong. Order books in Non-ferrous and Glass are beginning to recover from a low base. This will support
the €15 million earnings guidance as fixed-cost underabsorption eases and product mix improves. It will also drive meaningful
inventory reductions. The main risk remains macro-induced timeline slippage, with more than €50 million of revenue already
deferred into future years and €10 million moved into H2 2026.

Following a review of internal projects, FY 2026 capital expenditure guidance has been reduced from €130 million to €115
million. Working capital intensity is still expected to be c.22%, as the temporary inventory build is reduced and U.S.
accounts receivable reduce following the ERP go-live. This should support leverage declining to around 2.6x net debt to
adjusted EBITDA by year-end 2026.

Dividend

Consistent with the Company’s dividend policy to pay an interim dividend equal to one third of the previous final dividend,
the Board has declared an interim dividend of €0.60 per share representing €28 million in aggregate. The interim dividend will
be paid on 24 September 2026 to shareholders on the register on 28 August 2026.

 

FINANCIAL REVIEW

 

(€m) H1 2026 H1 2025 H1 2025 (constant currency) Change Change (constant currency)
Revenue 1,595 1,677 1,595 (5)% 0%
Cost of goods sold (1,241) (1,323) (1,271) (6)% (2)%
Gross profit 354 354 325 0% 9%
SG&A (171) (192) (188) (11)% (9)%
R&D expenses (18) (21) (20) (14)% (10)%
OIE (42) (54) (52) (23)% (19)%
EBIT 98 61 39 60% 149%
Amortisation (25) (25) (26) 0% (2)%
EBITA 123 87 65 42% 90%
Adjusted items 42 54 52 (23)% (19)%
Adjusted EBITA 165 141 117 17% 42%
Refractory EBITA 152 122 – 25% –
Vertical integration EBITA 13 19 – (32)% –

 

  H1 2026 H1 2025 H1 2025 (constant currency) Change Change (constant currency)
Steel          
Revenue (€m) 1,130 1,146 1,082 (1)% 5%
Gross profit (€m) 249 237 214 5% 17%
Gross margin 22.0% 20.7% 19.7% 130bps 230bps
Adjusted EBITA (€m) 126 95 75 33% 69%
Adjusted EBITA margin 11.2% 8.3% 6.9% 290bps 430bps
Industrial          
Revenue (€m) 423 487 470 (13)% (10)%
Gross profit (€m) 99 112 109 (12)% (9)%
Gross margin 23.4% 23.0% 23.2% 40bps 20bps
Adjusted EBITA (€m) 37 46 44 (19)% (15)%
Adjusted EBITA margin 8.8% 9.3% 9.3% (50)bps (50)bps

 

Reporting approach

The Company uses a number of alternative performance measures (APMs) in addition to measures reported in accordance with IFRS
Accounting Standards as adopted by the European Union (“IFRS”), which reflect the way in which the Board and the Executive
Management Team assesses the underlying performance of the business. The Group’s results are presented on an “adjusted” basis,
using APMs that are not defined or specified under the requirements of IFRS, but are derived from the IFRS financial
statements. The APMs are used to improve the comparability of information between reporting periods and to address investors’
requirements for clarity and transparency of the Group’s underlying financial performance. The APMs are used internally in the
management of our business performance, budgeting and forecasting. A reconciliation of key metrics to the reported financials
is presented in the section titled APMs.

All references to comparative 2025 numbers in this review are on a reported basis, unless stated otherwise. All reported
volume changes year-on-year are excluding mineral sales.

Revenue

The Group recorded revenues of €1,595 million, down 4.9% on a reported basis, and broadly stable on a constant currency basis.
Results were impacted by an €82 million foreign exchange headwind, which also weighed on earnings, primarily due to the
depreciation of the U.S. dollar and Indian rupee against the euro.

Revenue H1 2026 H1 2025 H1 2025 (constant currency) % change (reported) % change (constant currency)
North America 416 427 397 (3)% 5%
Europe & CIS 341 375 375 (9)% (9)%
Latin America 278 282 269 (1)% 4%
India 199 218 191 (9)% 4%
China & East Asia 173 182 176 (5)% (2)%
Middle East, Türkiye & Africa 146 149 144 (2)% 1%
           
Steel 1,130 1,146 1,082 (1)% 5%
Industrial 423 487 470 (13)% (10)%
Minerals 42 44 43 (5)% (2)%

 

North America remained the Group’s largest revenue contributor and benefited from the Resco acquisition completed at the end
of January 2025. Revenue growth in Steel, particularly in North America and other higher-value markets, was largely offset by
lower Industrial revenue and the impact of foreign exchange.

Average revenue per tonne in constant currency increased in all regions except Europe & CIS and China & East Asia, reflecting
higher pricing and continued progress growing 4PRO contracts in Steel. North America and META recorded the strongest
increases.

Steel accounted for 71% of Group revenue in H1 2026, above the prior year’s 68%, reflecting lower activity in Industrial
Projects. Industrial Projects remained subdued, with the sharpest decline in Glass, where revenue was down a further 40% on a
constant currency basis versus a weak prior-year period. Revenues also remained below historic peaks in Non-Ferrous Metals and
Industrial Applications, with total project numbers still around 40% below historic averages.

Cost of Goods Sold

Cost of goods sold decreased by 6% to €1,241 million (H1 2025: €1,323 million; figures excluding amortisation), driven by
lower plant-related personnel costs, despite unplanned cost increases related to the Middle East conflict of €28 million.

Plant-based personnel costs reduced by €22 million driven by plant closures, driving together with other production and
services related cost reductions, a large share of the total change in CoGS.

Raw material costs went up slightly by €5 million driven by rising Fused Magnesia, DBM, Alumina and resins prices, of which
approximately €10 million are caused by the impact of the Middle East conflict. Lower consumption and price management systems
of energy and freight services more than offset the €11 million increase in transport costs by the Middle East war.

Gross profit

Gross profit was flat year on year at €354 million, while gross margin improved to 22.2% from 21.1% in H1 2025. All regions
except LATAM recorded improvements in gross profit and gross margin. This was achieved despite lower shipments and average
revenue per tonne, as well as the fact that some of the €28 million of cost increases related to the Middle East conflict had
not yet fully been passed on to customers.

The Steel segment recorded a €12 million increase in gross profit, which was offset by an equivalent decline in Industrials.
Within Industrials, lower gross profit in Glass and Industrial Applications was not fully offset by improvements in
Non-ferrous and Cement & Lime, resulting in an overall decline in Industrial gross profit.

 

Gross profit H1 2026 H1 2025 H1 2025 (constant currency) % change (reported) % change (constant currency)
North America 118 117 100 1% 18%
Latin America 69 82 76 (16)% (9)%
Europe & CIS 68 67 71 1% (4)%
India 32 29 24 11% 37%
China & East Asia 32 29 27 8% 17%
Middle East, Türkiye & Africa 30 25 26 20% 15%
           
Steel 249 237 214 5% 17%
Industrial 99 112 109 (12)% (9)%
Minerals 6 5 5 27% 11%

 

Adjusted EBITDA

The Group recorded Adjusted EBITDA of €230 million, up 9% compared with the prior reporting period (H1 2025: €211 million).
The Adjusted EBITDA margin also improved to 14.4% (H1 2025: 12.6%).  On a constant currency basis, Adjusted EBITDA increased
by 24% year on year, highlighting the significant foreign exchange headwind in H1 2026.

Adjusted EBITA

Adjusted EBITA increased to €165 million (H1 2025: €141 million; €117 million on a constant currency basis), with the margin
rising to 10.3% (H1 2025: 8.4%). Adjusted EBITA improved more strongly than gross profit, reflecting the continued benefit of
cost-saving measures. The refractory margin contribution was 9.5 percentage points, above the total adjusted EBITA margin in
H1 2025. As is typical for the Group, the refractory margin is usually lower in the first half than in the second half,
reflecting the seasonally stronger contribution from higher-margin Industrial sales in H2.

Raw materials contributed 0.9 percentage points to adjusted EBITA, or €14 million, the lowest level on record, compared with
1.1 percentage points in 2025. While magnesite- and dolomite-based raw material prices remained at low levels in H1 2026,
lower refractory shipments led to fixed-cost underabsorption. Around €3 million of earnings were lost as a result of demand
disruption related to the Middle East conflict, as steel producers in the region reduced output and some Industrial Projects
were cancelled. In addition, some of the cost increases already described had not yet been fully passed on by 30 June 2026.

A foreign exchange headwind of €24 million continued to materially affect earnings in H1 2026, mainly due to the weakening of
the U.S. dollar and Indian rupee against the euro. Adjusted EBITA and Adjusted EBITDA both exclude €42 million of items
classified as “Items excluded from adjusted performance” (H1 2025: €54 million), as set out in the next section.

Items excluded from adjusted performance

In order to accurately assess the underlying performance of the business, the Group excludes certain items from adjusted EBITA
related to other income and expenses of €42 million, including related to -€21m Digitalisation investment, -€14m Network
Optimisation and -€7m SG&A reduction, largely in Europe.

Net finance expenses 

Net finance expenses increased to €51 million in H1 2026 from €47 million in H1 2025. Net interest expense totalled €29
million, up from €22 million in H1 2025, primarily caused by refinancing of existing debt facilities at higher base interest
rates and increased spreads driven by elevated leverage.

Foreign exchange losses reduced to €3 million (H1 2025: €13 million) driven primarily by lower Balance sheet exposures and
less volatility in some of the Group’s key currencies compared to H1 2025, including the U.S. dollar.

The increase in other net financial expenses to €19 million is mainly attributable to the positive impact in H1 2025 from the
revaluation of the Group’s obligation to purchase the remaining stakes it does not already own in Jinan New Emei and
Chongqing.

(€m) H1 2026 H1 2025
Net interest expenses (29) (22)
Interest income 6 7
Interest expenses on borrowings (35) (29)
FX effects (3) (13)
Balance sheet translation (5) (27)
Derivatives 2 14
Other net financial expenses (19) (12)
Present value adjustment (3) (3)
Factoring costs (7) (5)
Pension charges (5) (5)
Non-controlling interest expenses (1) (1)
Interest expense – Transaction costs (1) 0
Other (2) 1
Total net finance expenses (51) (47)

 

Taxation

Income tax for H1 2026 in the income statement amounted to €11 million (H1 2025: €3 million), representing a 23% reported
effective tax rate (H1 2025: 23%).

Reported profit before tax amounted to €47 million (H1 2025: €14 million). Adjusted profit before tax amounted to €117 million
(H1 2025: €90 million), with an adjusted effective tax rate of 23% (H1 2025: 23%). Adjusted items include non-taxable IFRS
income related to put option valuation, non-capitalizable losses due to restructuring projects, and non-deductible M&A-related
expenses.

Profit after tax

On a reported basis the Group recorded profit after tax of €36 million (H1 2025: €11 million), profit attributable to
shareholders of RHIM N.V. of €32 million (H1 2025: €7 million). Adjusted for OIE, profit after tax was €89 million with
adjusted earnings per share of €1.81 (H1 2025: €1.37).

Profit attributable to shareholders is stated after non-controlling interests of €86 million (H1 2025: €65 million). The
Group, holding a majority stake of 56% in RHI Magnesita India Ltd., attributes most of its non-controlling interests to the
earnings consolidated from this subsidiary.

H1 2026 Items excluded from H1 2026 H1 2025 Items excluded from H1 2025
(€m) reported adjusted performance adjusted reported adjusted performance adjusted
EBITA 123 42 165 87 54 141
Amortisation (25) 25 – (25) 25 –
Net financial expenses (51) 3 (48) (47) (4) (51)
Profit before tax 47 69 117 14 76 90
Income tax (11) (16) (27) (3) (18) (21)
Profit after tax 36 53 89 11 58 69
Non-controlling interest 4 – 4 4 – 4
Profit attributable to
shareholders 32 53 86 7 58 65
Shares outstanding 47 – 47 47 – 47
Earnings per share 0.68 1.12 1.81 0.15 1.23 1.37

 

Working capital

Working capital increased to €798 million compared to the 2025 FY Results figure (incl. Resco) of €769 million. Despite this,
cash conversion still stood at 97%.

Working capital intensity, measured as a percentage of annualised revenue over the last three months, increased one percentage
point to 24.4% (30 June 2025: 23.4%). The FX impact was €22 million compared to year-end 2025.

Inventories increased by €54 million on constant currency basis to year-end 2025, which was the main driver of the increase in
Net Debt. As a result, Inventory intensity increased temporary to 31.0% (30 June 2026) ahead of an expected stronger order
book in H2. This is consistent with the normal working capital cycle. 

All figures on Group level H1 2026 (in m€) H1 2025 (in m€) 2025 (in m€) H1 2026 (in %)^1 H1 2025 (in %)^1 2025 (in %)^1
Working Capital 798 800 769 24.4% 23.4% 21.7%
Inventories 1012 987 932 31.0% 28.9% 26.3%
Accounts Receivable 438 399 414 13.4% 11.7% 11.7%
Accounts Payable 652 586 577 20.0% 17.1% 16.3%

1 – percentage of annualised revenue over the last three months

Accounts receivable increased by €39 million year on year, mainly due to delayed invoicing in May 2026 in the U.S. as a result
of the ERP implementation. Accounts receivable is defined as trade receivables excluding factoring, plus contract assets, less
contract liabilities and down payments received. A full reconciliation is provided in the APM section.

Accounts payable excluding forfaiting increased by €66 million year on year, driven by higher inventory purchases.

Working capital finance, used to provide low-cost liquidity and support the Group’s commercial offering to customers, amounted
to €313 million on June 30 2026 (30 June 2025: €302 million). This comprised €272 million of accounts receivable financing
(factoring) (30 June 2025: 254 million) and €41  million of accounts payable financing (forfaiting) (30 June 2025: €48
million). This working capital financing level is within the limit set by the Board of €320 million.

Acquisitions

On 25 June 2026, RHI Magnesita announced a strategic joint venture with Khemka Refractories Pvt. Ltd. (“Khemka”), a leading
refractory raw materials manufacturer in India. The joint venture will focus on refractory raw-material recycling and is based
on the benchmark model already established in Europe with Mireco and in the U.S. with BPI. Khemka is a strong local partner,
with whom the circular local-for-local business model can be scaled in India. The establishment of the joint venture does not
require a material cash outlay.

The aim is to establish a dedicated recycled raw material facility to feed the Group’s existing footprint in India. Using
recycled raw materials instead of mined virgin raw materials reduces raw material costs and lowers the carbon footprint of
refractories. It also reduces the dependency on imported raw materials. The facility will be located in Odisha, at the heart
of India’s steel industry. As there are currently no meaningful end-to-end refractory raw-material recycling capabilities in
the Indian market, the proposed Odisha facility would be a first-of-its-kind project. The aim is to double recycling raw
material volumes of this joint venture in the next years feeding own operation and external sales in the world’s
fastest-growing steel and refractory market.

Cash flow

Adjusted operating cash flow decreased to €160 million (H1 2025: €175 million), representing a cash flow conversion from
adjusted EBITA of 97% (H1 2025: 124%). This temporary reduction was driven by higher working capital.

Capital expenditure for 2026 will be reduced from the guided €130 million to approximately €115 million. Total capital
expenditure spent in 2026 H1 was approximately €46 million (H1 2025: €45 million), equally split into maintenance and value
projects. Most spending on value projects is associated with Network Optimisation.

Interest paid on borrowings and leases, net of interest received, increased by €1 million to €40 million (H1 2025: €39
million), primarily due to higher interest expense following the debt refinancing. Cash dividends paid in the first six months
of 2026 were broadly stable year on year at €57 million.

Financial position

Net debt increased by €33 million to €1,528 million compared with year-end 2025, driven by working capital cash consumption.

The Group’s leverage ratio remained stable at 2.9x net debt to Adjusted EBITDA, with deleveraging expected to begin in the
second half of 2026 toward the Group’s target of 2.6x at year-end 2026.

Available liquidity at 30 June 2026 was €1,030 million (31 December 2025: €955 million), mainly denominated in Euro. The gross
debt mix was 69% floating and 31% fixed, and the weighted average cost of debt at 30 June 2026 was 3.54%, including swaps.

In H1 2026, the Group refinanced a €232 million syndicated OeKB-backed term loan maturing in May 2027 with a new €350 million
syndicated OeKB-backed term loan maturing in April 2031. In July 2026, the Group further issued €450 million of
Schuldscheindarlehen with an average tenor of 4.4 years to address the remaining debt maturities in 2026 and pre-finance
further maturities in 2027.

Return on invested capital

ROIC is used to assess the Group’s efficiency in executing its capital allocation strategy, which is designed to support
organic growth, disciplined M&A and shareholder returns. ROIC is an APM; see the APM section for full details of how ROIC
reconciles to IFRS metrics.

Under the APM definition, ROIC was 8.3% in H1 2026 (H1 2025: 5.8%; previously stated value: 5.5%; invested capital restated to
make 2025 and 2026 figures comparable). Higher NOPAT, driven by improved earnings, increased ROIC in both refractories and
vertical integration, while invested capital increased only marginally.

  Group Vertical Integration Refractory
ROIC H1 2026 8.4% 4.0% 9.3%
ROIC H1 2025 5.8% 4.2% 6.1%

 

OPERATIONAL REVIEW

Steel overview

Supplying refractory products and services to the steel industry accounted for approximately 71% of Group revenues in H1 2026
(H1 2025: 68%). Applications span ironmaking, primary steelmaking, secondary metallurgy and casting, with product lifecycles
ranging from hours to several years depending on the application. As a result, refractory consumption is typically classified
as an operating expense by steel producers and represents approximately 2-3% of steelmaking operating costs.

 

Steel H1 2026 H1 2025 H1 2025 (constant currency) Change Change (constant currency)
Revenue (€m) 1,130 1,146 1,082 (1)% 5%
Gross profit (€m) 249 237 214 5% 17%
Gross margin 22.0% 20.7% 19.7% 130bps 230bps
Adjusted EBITA (€m) 126 95 75 33% 69%
Adjusted EBITA margin 11.2% 8.3% 6.9% 290bps 430bps

 

Global steel markets showed encouraging resilience in the first half, despite ongoing macroeconomic headwinds. Two key factors
continued to influence the market: soft steel demand and elevated Chinese steel exports. Worldsteel data available for the
first half of 2026 showed crude steel production decreasing  by 0.7% originating predominantly from softer China and Russia.
Several Western countries showed signs of a recovery towards the end of the Period. Broader macroeconomic pressures, including
subdued industrial investment, weak consumer confidence and ongoing trade uncertainty, continued to weigh on the market with
more upside than downside in the foreseeable future. Chinese steel exports also remained elevated, despite contracting by 5.6%
between January and June 2026 compared with the same period last year. Falling Chinese steel exports directly onshore steel
production elsewhere, where the Group typically has a higher market share.

Steel revenues declined by 1% to €1,130 million (H1 2025: €1,146 million), while increasing by approximately 5% on a constant
currency basis. Shipped steel refractory volumes were down 1%, while average revenue per tonne increased by 6%, reflecting
stronger pricing and mix in North America and India. At a regional level, volume growth in India and China & East Asia was
insufficient to offset lower shipments in Europe, Latin America and META.

Gross profit increased by 5% to €249 million (H1 2025: €237 million), with gross margin improving to 22.0% (H1 2025: 20.7%).
This improvement was mainly driven by stronger performance in North America, Europe, China & East Asia and India, supported by
pricing, mix and cost measures. This was partly offset by weaker performance in LATAM, where competitive pressure and softer
market conditions reduced gross profit, and in META, where conflict-related lower volumes continued to weigh on profitability.

Industrial overview

RHI Magnesita is a leading supplier of refractory products and services to customers in the Cement & Lime, Non-ferrous metals,
Glass, and Industrial Applications (Aluminium, Hydrocarbon Process Industries, Waste to Energy, and others). The Industrial
business accounted for approximately 29% of Group revenues in H1 2026.

Industrial customers typically have longer replacement cycles than Steel customers, ranging from one to 20 years. Refractories
are generally treated as capital expenditure by Industrial customers and represent between 0.2 and 1.5% of total costs over
the life cycle of a facility.

Industrial H1 2026 H1 2025 H1 2025 (constant currency) Change Change (constant currency)
Revenue (€m) 423 487 470 (13)% (10)%
Gross profit (€m) 99 112 109 (12)% (9)%
Gross margin 23.4% 23.0% 23.2% 40bps 20bps
Adjusted EBITA (€m) 37 46 44 (19)% (15)%
Adjusted EBITA margin 8.8% 9.3% 9.3% (50)bps (50)bps

 

Revenue in the Industrial business decreased by 13% to €423 million (H1 2025: €487 million), equivalent to a decline of
approximately 10% on a constant currency basis. Industrial refractory volumes declined by 6% despite a weak comparative base,
while average revenue per tonne decreased by 7%, reflecting a weaker mix due to lower Industrial Projects sales. The decline
was mainly driven by Glass and Industrial Applications.

Gross profit decreased by 12% to €99 million (H1 2025: €112 million), while gross margin improved slightly to 23.4% (H1 2025:
23.0%) thanks to disciplined cost management and fixed-cost reductions delivered through the Network Optimisation programme.

Cement delivered a resilient performance and was broadly flat year on year.

Industrial Projects had a softer first half, although the business continues to benefit from its differentiated capabilities
in highly complex, large-scale projects across Non-ferrous, Glass and Industrial Applications. These projects typically
combine engineering, process optimisation, installation and complex refractory linings supplied from multiple plants, and RHI
Magnesita remains the only global heat management provider with this breadth of capability across all end-use industries. The
fundamentals for Industrial Projects remain strong globally despite the weakness in the last quarters. Particularly
Non-Ferrous remains key for long-term global mega trends like electrification.

Customers continue to push back investment decisions amid uncertainty stemming from the Middle East war. This has kept the
number of Industrial Projects close to the historic low of 2025, particularly in Glass and Industrial Applications, with
projects shifting from H1 2026 to H2 2026 and even into 2027/2028.

Non-ferrous metals projects were stable year on year at a low level, with modest growth in projects offset by lower
maintenance activity. Glass and Industrial Applications weakened, with lower project and maintenance activity year on year.

More than €50 million of Industrial Projects revenue has been deferred past the end of this year, and several projects were
cancelled, partly in connection with the Middle East war. A further €15 million of Industrial Projects revenue has been
deferred into H2 2026, some of which may be delayed further.

While the project pipeline in Non-ferrous is improving, Glass remains around the historic low of 2025. The Group’s market
share, and therefore the number of Industrial Projects in Industrial Applications, remains low, creating an opportunity to
improve performance and offset some of the weakness in Glass.

Raw materials

Magnesite and dolomite-based raw material prices remained at low levels in H1 2026, resulting in a stable margin contribution
from raw materials of 0.9 ppts of adjusted EBITA. Unfavourable FX movements also impacted the vertical integration margin
negatively.

Alumina-based raw material prices were stable in H1 2026 and remained in the lower half of the medium-term price range.

There are encouraging signs in China in the ongoing magnesite industry reform. Output and capacity controls for both raw
magnesite and magnesia are strictly enforced, mineral rights continue to be consolidated and legacy polluting capacity being
forcefully shut. Although these measures have not yet translated into meaningful price increases in the magnesia grades most
relevant for refractories. While such an increase is not expected in the coming quarters, the Group is focused on self-help
measures to improve profitability from backward integration. These measures include lower costs like fuel switches to
lower-cost fuels and a strategic minerals sales initiative. The focus of the sales initiative is addressing non-refractory
markets such as animal feed, construction and hydrometallurgy across all non-China raw material operations, including Brumado
(Brazil), Eskisehir (Türkiye) and Breitenau (Austria). Progress is already visible, and higher revenue and earnings are
expected in H2 2026.

Raw materials not utilised internally by the Group are sold on the open market and reported under Minerals, generating
revenues of €42 million in H1 2026 (H1 2025: €44 million). Revenue from the base business declined slightly due to softer
reference prices from China, but this was offset by a one-off legal review with a key customer in Europe. Minerals sales
generated approximately €2 million of adjusted EBITA in the Period.

Regional business units

 

Revenue H1 2026 H1 2025 H1 2025 (constant currency) % change (reported) % change (constant currency)
North America 416 427 397 (3)% 5%
Europe & CIS 341 375 375 (9)% (9)%
Latin America 278 282 269 (1)% 4%
India 199 218 191 (9)% 4%
China & East Asia 173 182 176 (5)% (2)%
Middle East, Türkiye & Africa 146 149 144 (2)% 1%
Minerals 42 44 43 (5)% (2)%
Total 1,595 1,677 1,595 (5)% 0%

 

Gross profit H1 2026 H1 2025 H1 2025 (constant currency) % change (reported) % change (constant currency)
North America 118 117 100 1% 18%
Europe & CIS 67 67 71 1% (4)%
Latin America 69 82 76 (16)% (9)%
India 32 29 24 11% 37%
China & East Asia 32 29 27 8% 17%
Middle East, Türkiye & Africa 30 25 26 20% 15%
Minerals 6 5 5 27% 11%
Total 354 354 325 0% 9%

North America

Revenues in North America decreased by 3% to €416 million (H1 2025: €427 million), but increased by 5% in constant currency
terms. Average revenue per tonne remained flat on a regional level. In the Steel business, pricing improved as customers
showed greater willingness to accept price adaptations aimed at recovering inflationary cost increases across raw materials,
freight, energy and labour. These positive effects were partly offset by weaker pricing and lower volumes in the Industrial
business.

Gross profit increased slightly to €118 million (H1 2025: €117 million), with gross margin improving to 28.3% (H1 2025:
27.3%). In constant currency terms, gross profit increased by 18% and demonstrating the region’s solid underlying
profitability. The margin improvement reflected stronger Steel performance, partly offset by weaker fixed-cost absorption from
lower volumes and reduced profitability in Industrial.

Steel demand and production in the U.S. remained firm, with worldsteel data showing U.S. steel production for the first half
of 2026 approximately 6.3% higher than in the prior year. The Group’s volumes also increased but lacked behind market growth
because of phasing. Positive price adaptations more than offset the volume weakness and supported above Group average revenue
performance in the region. The Group continues to differentiate itself through its focus on 4PRO offering and deep customer
integration.

In the Industrial business, performance was affected by the postponement of several large projects amid macroeconomic
uncertainty, as well as generally weak demand and an unfavourable sales mix in the Glass sector during H1 2026. Industrial
activity remains more exposed to the timing of customer capital expenditure decisions, many of which have been deferred due to
heightened geopolitical uncertainty. A recovery in the second half of the year and beyond will depend on improved project
conversion, increased customer investment activity and the continued normalisation of operational processes. The Group
continues to benefit from the enlarged Resco portfolio, which has expanded its offering in petrochemical and aluminium
applications.

The region’s main operational focus in H1 2026 was stabilising the business following the ERP rollout in May 2026. The
transition created temporary backlogs in shipping, invoicing, accounts payable and reporting, requiring manual workarounds.
Management implemented recovery actions, including additional resources, daily progress reviews, process workarounds and
automation where possible.

The region continued to advance its recycling business model, with the BPI JV expected to strengthen supply chain resilience
through expanded local processing of circular raw materials. Recycling remains a key strategic priority in North America,
supported by growing customer demand for lower-carbon solutions and increased use of circular raw materials. The region also
continues to benefit from investments in new electric arc furnace and mini-mill capacity, underpinned by the strong earnings
of U.S. steel producers and a supportive U.S. trade policy environment.

Europe & CIS

Europe & CIS revenues decreased by 9% to €341 million (H1 2025: €375 million), primarily reflecting a 7% decline in shipped
volumes, driven by geopolitical tensions and a subdued customer environment.The reduction was more pronounced in the
Industrial business, while the Steel business proved comparatively more resilient.

Gross profit remained broadly stable at €68 million (H1 2025: €67 million) despite the lower revenue base, supported by
disciplined pricing, operational improvement initiatives and fixed-cost savings from Network Optimisation. These measures
largely offset the impact of lower volumes, energy and freight cost inflation, and reduced plant utilisation. This resulted in
improved Gross Margin of 19.8% from 17.8% in the prior year. The improvement of Gross Margin together with self-help savings
delivered a siginificant improvement in adjusted EBITA.

The Steel business was more resilient than the Industrial business, supported by pricing momentum and a release of delayed
customer orders towards the end of the half. While underlying customer demand remained subdued, order intake improved during
the period, indicating the early stages of a recovery.  According to worldsteel data, steel production volumes declined by
3.5% in H1 2026, less pronounced than the decline in the Group’s shipped volumes over the Period. By contrast, German steel
production increased by 8.9% year-on-year according to worldsteel data, an encouraging sign, with further upside potential in
the coming year supported by German infrastructure investment and EU safeguard measures. The Group is less active in Germany
compared to the rest of Europe, thereby avoiding some of the demand decline in recent years, but also missing parts of the
recent rebound as well.

The EU Carbon Border Adjustment Mechanism and revised steel tariff-rate quota regime are expected to affect the competitive
environment for European steel producers but did not materially impact the Groups H1 2026 performance. The extent of any
impact on the region will depend on customer production levels, sourcing decisions and investment plans.

Against this backdrop, near-term performance is expected to be driven by order phasing, price adaptations and ongoing cost
mitigation initiatives. In addition, the Group expects to unlock further earnings through its 4PRO offering and value-sharing
approach, supporting stronger second-half performance and sequential earnings improvement.

Industrial performance was weaker in H1 2026, reflecting mixed conditions across end markets. Cement remained relatively
resilient, supported by stable market conditions, ongoing investment activity and the Group’s cost discipline. By contrast,
the Glass business remains at historic lows. Weak demand, for example from automotive, limit the need for glass producers to
reline their furnaces, and the few furnaces to be relined or repaired are targeted aggressively by Chinese exporters.
Encouraging business gains with glass OEMs and special glass manufacturers cannot fully offset the wider industry challenges.

In response to lower capacity utilisation, the Group accelerated fixed-cost and Network Optimisation Programme Europe,
including a review of its production footprint in France and Germany. This includes the potential closure of two plants
(France, Germany) and the potential conversion of another into a circular economy site (France). These actions will reduce
fixed costs, avoid future investment requirements at multiple sites, and support a more efficient, resilient and sustainable
production setup in Europe.

Latin America

Revenues in Latin America decreased by 1% to €278 million in H1 2026, compared with €282 million in H1 2025. This reflected
softer market conditions, headwinds related to U.S. tariffs  and continued pricing pressure from Chinese refractory imports.
Average revenue per tonne was broadly stable, although the sales mix remained less favourable, with a lower contribution from
higher value products and industrial projects.

Gross profit reduced by 16% to €69 million (H1 2025: €82 million), with gross margin declining to 24.8% (H1 2025: 29.2%). The
lower margin reflected reduced sales volumes, weaker product mix, foreign exchange depreciation and higher energy costs linked
to geopolitical tensions in the Middle East. Lower plant utilisation also resulted in weaker fixed-cost absorption. These
headwinds were partly mitigated by productivity improvements and other self-help initiatives focused on cost optimisation.

Steel remained the larger contributor to regional profitability, but performance was affected by lower customer production,
U.S. tariff-related cost pressure and increased competition from imported steel and refractories. According to worldsteel
data, regional steel production increased by 2.0% in H1 2026 compared with the prior year Period, in contrast to the Group’s
decline in shipment volumes in the region. Steel production volumes at certain major regional customers continued to decline,
with plant shutdowns and reduced operating rates placing pressure on refractory consumption. Despite these challenges, RHI
Magnesita regained market share at several key integrated steel plants in the region and benefited from stronger performance
in Mexico and neighbouring countries. The region is expected to recover in H2 2026 as temporary volume shortfalls unwind,
supporting an improvement in overall performance.

Industrial revenues remained broadly stable. Higher sales volumes were offset by an unfavourable product mix, as demand
shifted from higher-value Non-ferrous metals refractory solutions towards lower-value Cement & Lime products. In Cement, the
Group strengthened its position through new long-term agreements with strategic customers, supporting business continuity and
the further deployment of the 4PRO model.

The expansion of 4PRO remained a key commercial priority. During the Period, the region renewed multi-year agreements with key
customers and continued to grow the performance-based model, reinforcing the importance of a strong and sustainable local
value chain.

Operational performance was impacted by lower volumes at sites across Brazil, leading to an increasing focus on manufacturing
efficiency, supply reliability and cost reduction. The Group continued to progress strategic initiatives in Brazil to support
local refractory production. RHI Magnesita continued to pursue recognition of magnesite as a critical or strategic mineral
under Brazil’s proposed National Policy for Critical and Strategic Minerals. 

The region continued to advance its circular raw materials strategy, with recycling rates expected to improve in 2026.
Recycled content in finished goods also increased year to date, supported by the qualification and implementation of
additional recycled raw materials.

India

Revenues in India decreased by 9% to €199 million (H1 2025: €218 million), despite stable shipped volumes. The decline
reflected ongoing pressure on average revenue per tonne, driven by competitive market conditions and an adverse product mix,
alongside the impact of negative foreign exchange effects.

Gross profit increased by 11% to €32 million (H1 2025: €29 million), with the gross margin expanding to 16.2% (H1 2025:
13.3%). While average revenue per tonne declined, targeted price adaptations and cost mitigation initiatives supported gross
profit, partly offsetting higher energy costs and broader inflationary pressures. These self-help and operational improvement
measures also contributed to higher adjusted EBITA in the region.

The Indian refractories market remained structurally attractive. Steel continued to benefit from strong underlying demand
growth in India, although competition from domestic and imported refractory suppliers remained intense. According to
worldsteel data, steel production in India increased by 7.1% in the first half of 2026. Steel customers’ focus on reducing
operating costs continued to put pressure on refractory pricing, although larger integrated steel customers increasingly
assessed suppliers on total cost of ownership, campaign life and furnace uptime rather than purchase price alone. The Group
made progress in defending and expanding its position through performance-based 4PRO contracts. Price increases were secured
with a number of major steel customers, and interest in robotic solutions continued to develop, with selected installations
operating at major steel plants and further deployments under evaluation.

Industrial performance was held back by the timing of customer projects, with shipped volumes declining in the Period.
However, underlying demand remained healthy across Cement & lime, Non-ferrous metals, Glass and Industrial applications,
supported by infrastructure investment and capacity expansions. Price increases were agreed with selected customers, while
demand increasingly focused on solutions that help improve reliability, reduce operating costs and support longer-term
efficiency, as our customers also face stiff competition.

Operational performance was below expectations, primarily due to lower-than-anticipated production volumes, which resulted in
weaker fixed-cost absorption. In addition, selected raw material and energy costs increased, partly reflecting supply
disruptions associated with the conflict in the Middle East.

In June 2026, the Group announced a strategic joint venture with Khemka Refractories to establish a refractory recycling
facility in Odisha, India. RHI Magnesita will hold a 51% controlling stake and Khemka Refractories will hold the remaining
49%, with the transaction subject to customary closing conditions and expected to close in Q3 2026. The partnership will
strengthen the Group’s local recycling platform and raw material security in India by combining RHI Magnesita’s global
recycling expertise with Khemka’s regional manufacturing footprint and supplier network, supporting the Group’s circularity,
CO₂ reduction and 4PRO Solutions strategy.

China & East Asia

Revenues in China & East Asia declined by 5% to €173 million (H1 2025: €182 million). A 4% increase in shipped volumes was
offset by lower average revenue per tonne, reflecting competitive market conditions and an unfavourable product mix.

Gross profit increased by 8% to €32 million (H1 2025: €29 million), with gross margin improving to 18.4% from 16.2% in the
prior year. The improvement was supported by self-help cost reduction measures and lower raw material costs compared with the
prior period.

Steel demand in China remained under pressure from weakness in the property sector and softer infrastructure activity, while
broader East Asian markets continued to face oversupply via Chinese steel and refractory exports. Steelmakers remained focused
on reducing refractory spend, with multi-supplier tendering and competitor price reductions putting pressure on pricing.
Despite this backdrop, the Group maintained steady shipment momentum and broadly retained pricing through its 4PRO offering,
outperforming the decline in Chinese steel production, which fell by 3.0% in the first half of 2026 according to worldsteel
data.

Vietnam was a notable bright spot in the region. According to worldsteel data, Vietnamese steel production increased by 26.9%
in the first six months of 2026, supported by stronger domestic demand and higher production activity. The Group also achieved
comparable growth in Vietnam, with higher steel-related shipments supported by its contract business and continued customer
engagement.

Industrial markets remained challenging, with weaker construction-related demand affecting Cement and customers continuing to
prioritise short-term cost savings. Pricing pressure remained high, particularly in cost-sensitive applications. However, the
Group secured new customer wins in Cement & Lime, Non-ferrous metals, Glass and Industrial Applications, supported by new
product sales.

Operational and financial performance in Chinese plants was strong. Increasing competition in some markets lead to production
shifts from other regions to more competitive Chinese plants which drives their volumes, hence attractive fixed cost
absorption and high productivity.

Middle East, Türkiye & Africa

Revenues in the Middle East, Türkiye and Africa decreased by 2% to €146 million (H1 2025: €149 million), driven by significant
market headwinds. Geopolitical uncertainty resulted in industry wide supply chain disruptions and increased customer caution.
Regional business performance remained encouraging despite this backdrop, with implemented price increases supporting a
sequential improvement over the course of the period, particularly towards the end of H1 2026.

Gross profit increased to €30 million (H1 2025: €25 million), with gross margin improving to 20.2% from 16.6% in the prior
year. The improvement reflected price adaptations and better commercial discipline, although margin expansion was constrained
by higher energy and freight costs.

Steel performance was negatively impacted by lower customer production in the Middle East, where crude steel production
declined by 7.3% in H1 2026 compared with H1 2025, according to worldsteel data. Performance was further affected by reduced
iron ore availability resulting from logistics disruptions, as well as tighter working capital management by customers. The
Group’s exposure to North Africa partially offset these headwinds, supported by strong performances in Egypt and Morocco,
where crude steel production increased by 13.3% and 5.4%, respectively, during the period, according to worldsteel data.

Industrial performance was more resilient than Steel, supported by Cement, Non-ferrous metals and selected project activity.
Cement demand remained robust in Türkiye and Africa, while Non-ferrous metals benefited from ongoing customer investment in
Africa. Glass market conditions remained challenging globally; however, demand in Africa and the Middle East was supportive,
helping to offset the impact of intense competition from Chinese refractory suppliers. Demand from Aluminium and HPI
(Petrochem) remained below average, reflecting slower project execution and cautious customer investment.

Commercial execution remained a key strength, with new customer wins, continued expansion of 4PRO solutions, particularly in
cement, and progress in higher-value product development supporting future growth. Recycling initiatives remained on track and
continue to contribute to both sustainability objectives and improved raw material efficiency.

Operational performance improved at plant Eskişehir, while plant Sormas remained focused on enhancing cost competitiveness
across selected product lines. Higher energy costs and logistics disruption remained the principal cost headwinds during the
period. The implementation of S/4HANA has improved operational transparency and cost visibility, supporting ongoing
initiatives to optimise inventory, manufacturing performance and strategic product positioning.

 

PRINCIPAL RISKS AND UNCERTAINTIES

The Group has an established risk management process based on a formally approved framework with standardised risk assessments
to systematically identify and assess risks and uncertainties across RHI Magnesita’s Regions and Group.

Material risks with potentially significant impacts on the Group, its results or its strategic objectives are discussed with
Senior Leaders, the Executive Management Team and reviewed regularly by the Board. The principal risks were presented in the
2025 Annual Report, available on the Group’s website.

As part of its ongoing risk monitoring, the Board reviewed the internal and external risk environment and confirmed that the
eleven principal risks reported in the 2025 Annual Report remain relevant for the second half of 2026. Emerging risks were
also reviewed.

The risk scoring of three principal risks has changed compared with H2 2025, as summarised in the table below.

Compared with H2 2025, RHI Magnesita’s overall risk landscape remains challenging, reflecting the continued focus on the
Group’s strategic and digital transformation agenda while operating in a volatile external market environment. Macroeconomic
and geopolitical developments continue to influence several principal risks, particularly market demand and pricing.

Risks may occur individually or in combination. If they occur in combination, their impact may be reinforced. The Group might
be facing other risks that are currently unknown or not considered material. A comprehensive analysis of principal and
emerging risks will be included in the 2026 Annual Report.

Principal risk Change in risk level Change description
While confidence in the execution of the Raw Material strategy has
increased, supported by the progress of the Caustic Calcined Magnesia
1 – Macroeconomic environment and Unchanged initiative, the overall Principal Risk remains elevated. This is due
geopolitical risk to the continued weakness in the macroeconomic environment and
sustained pressure on magnesite raw material prices, which continue
to limit profit improvement.
The risk level has increased as the Group enters the roll-out phase
of its digital transformation agenda, with greater execution
complexity and an increased risk of business disruption. Disciplined
2 – Inability to execute key Increased implementation is required to realise the expected operational and
strategic initiatives financial benefits. At the same time, continued working capital
pressure, driven by elevated inventory levels and overdue
receivables, has constrained cash generation and increased pressure
on net debt, leverage, and capital efficiency.
3 – Significant changes in the
competitive environment or speed of Unchanged  
disruptive innovation
4 – Reliability of the end-to-end Unchanged  
value chain
5 – Sustainability – Environmental Unchanged  
and climate risks
6 – Sustainability Health and Unchanged  
safety risks
7 – Regulatory and compliance risks Unchanged  
(excluding Trade Compliance)
8 – Cyber and information security Unchanged  
risk
The sanctions framework is mature and is supported by established
9 – Trade Compliance Decreased governance, approval gates and internal controls. Combined with the
absence of any material risk events, this supports a reduction in
both the likelihood and impact assessment.
The residual risk has decreased as organizational capacity to execute
10 – Organizational capacity to strategic priorities has strengthened. Clear governance, regular
execute strategy, incl. company Decreased performance reviews, greater transparency, and stronger
cultural values cross-functional alignment have improved execution discipline and
reduced the likelihood of material organizational misalignment.
11 – Ability to s

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